Save the date for the 2014 IPF Conference that will be held in Milan, where we will investigate topics on Innovation in Public Finance focusing mainly on PPP/PFI and Project Finance.
Demands for public services are increasing in developed countries, especially because of demographic changes leading to increasingly elderly populations with their high care and pension costs. However, availability of public resources is diminishing, especially as a result of the financial crises in the private and public sectors, the ensuing economic downturn and the consequent fall in tax revenues from incomes, profits and expenditures. For such reasons it is crucial to promote innovation in public finance so as to help the public sector optimize the allocation of its resources to finance public services infrastructures.
In this context, the involvement of the private sector in funding and managing public services can increase spending capacity and efficiency in the management of projects and services. Public resources can be used more effectively by leveraging private resources to achieve additionality in co-designed and co-funded schemes to promote cost-containment, to reduce wasteful spending and to improve service quality. These outcomes can, in principle, be made possible by the for-profit approach of the private sector promoting the financial sustainability of initiatives in which it partners the public sector.
Public-Private Partnerships (PPPs)/Private Finance Initiatives (PFIs) are possible solutions. They are a particular form of public procurement characterized by the involvement of the private sector, at different stages and with different roles, in the construction of public service infrastructure (railways, roads, hospitals, schools, renewable energy power plants, etc.) and the subsequent delivery of services.
Many countries already have extensive experience in these kinds of projects but experience suggests that the solution is not straightforward because there is a track record of failures where value for money has not been achieved. In particular, containing costs, reducing wasteful spending and improving service quality have not always been secured. PPP/PFI schemes have to be designed very carefully if they are to achieve desired public policy outcomes. Close attention has to be paid to the details of contracting, risk management, financial structure, etc., without forgetting to take into consideration local parameters such as culture, institutions, professional practices, financial markets, governance systems and policy.
With this perspective in mind, the 2014 Innovation in Public Finance (IPF) conference has been organised, which will be held in Milan on 26 November 2014.
The Conference is seeking papers that explore innovative public finance addressing PPP or Project Finance issues. Please refer to the call for papers for more details.